JAISALMER, Dec 21: The GST Council on Saturday deferred decisions on a tax rate cut on life and health insurance premiums and a tax rate overhaul meant to raise revenue collection as two ministerial panels decided to deliberate further before recommending changes to the federal indirect tax body, three persons aware of discussions said.

The move enables state finance ministers and officials from the central and state governments to deliberate on these further.

Samrat Chaudhary, deputy chief minister of Bihar and the convenor of the group of ministers (GoM) on insurance, told reporters that the panel had not submitted its recommendations to the council.

“For the report that was to be given by the GST GoM, many ministers were of the view that one more meeting should happen. Whether it is for group insurance, individual insurance or senior citizens’ insurance, we will do another meeting for it. We will discuss it all in the next meeting,” Chaudhary said.

Chaudhary, who is also the convenor of the ministerial panel on goods and services tax (GST) rate rationalization—an exercise to boost tax revenue by raising rates and fixing tax anomalies—said the panel’s recommendations were not placed before the Council.

A second person, who is also privy to the developments in the council's 55th meeting, said a decision on insurance rate cut had been deferred, and the panel on rate rejig had not submitted its recommendations.

In its November meeting, the GoM proposed exempting premiums for term life insurance from GST, and it recommended exemption for premiums paid by senior citizens for health insurance. It also suggested exempting premiums for health insurance policies with coverage up to ₹5 lakh, but 18% GST would remain on policies with coverage exceeding ₹5 lakh.

The 55th GST Council meeting took place in Jaisalmer, Rajasthan.

Switzerland Revokes India's 'Most Friendly Nation' Status Over Nestle Verdict

BERN, Dec 13: Switzerland has taken a unilateral stand after the Supreme Court of India's ruling in the Nestle case. It has revoked the 'Most Friendly Nation' or MFN status accorded to India under the Double Taxation Avoidance Agreement or DTAA treaty.

Switzerland's move marks a significant shift in bilateral treaty dynamics and will result in a big impact on Indian companies operating in Switzerland as well as on Swiss investments in India.

In its official statement on December 11, the Swiss finance department named the Supreme Court of India and cited its 2023 ruling as the reason for its decision to remove India's MFN status.

In its order, the Supreme Court had said that the MFN clause between two nations does not apply automatically when a country joins the OECD, especially if the Indian government already had a prior tax treaty with that country before joining the grouping.

The OECD or Organisation for Economic Co-operation and Development was established in 1961 and is headquartered in Paris. It calls itself a forum and knowledge hub for data, analysis, and best practices in public policy to build stronger, fairer, and cleaner societies - helping to shape better policies for better lives. It works closely with policy makers, stakeholders and citizens to establish evidence-based international standards and to find solutions to social, economic and environmental challenges.

India had signed tax agreements with Lithuania and Colombia under which the tax rates on certain types of income were lower than the rates it provided to OECD countries. Both countries later joined the OECD.

Under the OECD, the effect of an MFN clause is that one country obligates itself to its treaty partner with respect to offering it a 'more favourable' tax treatment.

Switzerland assumed that Colombia and Lithuania joining the OECD meant a 5 per cent rate for dividends would apply to the India-Switzerland tax treaty under the MFN clause, instead of the 10 per cent which was mentioned in it.

But the Supreme Court ruling meant otherwise -- that the MFN clause between two nations does not apply automatically when a country joins the OECD, and that the prior tax treaty takes precedence, unless the MFN clause is specifically mentioned in a 'notification' in accordance with Section 90 of the Income Tax Act.

According to the statement by Switzerland's finance department, in 2021, the Delhi High Court while hearing the case against Nestle, upheld the applicability of the residual tax rates after taking into account the MFN clause under the Double Taxation Avoidance Agreement. This was in line with how Switzerland had interpreted it.

However, in a ruling dated October 19, 2023, the Supreme Court reversed the high court's judgement and stated that, the applicability of the MFN clause was not triggered automatically. The top court ruled that the MFN clause "was not directly applicable in the absence of 'notification' in accordance with Section 90 of the Income Tax Act" - a ruling that impacted Nestle and in-turn went against what Switzerland had hoped for.

Switzerland has now responded by unilaterally revoking India's MFN status and squarely named the "Indian Supreme Court" as the reason for its decision.

This means that from January 1, 2025, Switzerland will levy a 10 per cent tax (instead of the current 5 per cent) on dividends payable to Indian tax residents and entities who claim refunds for Swiss withholding tax and for Swiss tax residents who claim foreign tax credits.

The Swiss Finance Department released a statement in which it announced "Suspension of the application of the MFN clause of the protocol to the agreement between the Swiss Confederation and the Republic of India for the avoidance of double taxation with respect to taxes on income."

The statement cited the "2023 ruling by Indian Supreme Court" in a case relating to Nestle for its decision to withdraw the MFN status.

Revenue Secretary Sanjay Malhotra Appointed New RBI Governor

NEW DELHI, Dec 9: Revenue Secretary Sanjay Malhotra has been appointed Governor of the Reserve Bank of India (RBI). He will take charge from Wednesday for three years, the government said in a statement. Malhotra is a 1990-batch Indian Administrative Service (IAS) officer from the Rajasthan cadre.

He is a Computer Science graduate from the Indian Institute of Technology, Kanpur, and has a Master's in Public Policy from Princeton University, US.

In a career spanning over 33 years, Malhotra has worked in several sectors including power, finance and taxation, information technology, mines etc.

Before he was appointed Revenue Secretary, he was Secretary in the Department of Financial Services.

He has extensive experience in finance and taxation at the state as well as the central government, according to information on the Department of Revenue website.

It says Mr Malhotra played an instrumental role in tax policy formulation for direct and indirect taxes.

Malhotra replaces Shaktikanta Das, whose tenure will end on Tuesday. Das was appointed the 25th Governor of the RBI on December 12, 2018, after the abrupt exit of his predecessor Urjit Patel.

Das was granted an extension after completing his three-year term in office.

Soon after taking charge of the RBI, Das provided confidence to the market shaken by the sudden resignation of Patel amid a tussle between the RBI and the government over the issue of surplus transfer.

DLF Appoints Badal Bagri As Group CFO

NEW DELHI, Dec 3: The Board of Directors of DLF Limited, at its meeting held today, approved the appointment of Badal Bagri as the Chief Financial Officer (CFO) of the company, with the designation of Group CFO, effective December 6, 2024.

The announcement follows the company’s earlier communication dated May 13, 2024, regarding the interim appointment of Ashok Kumar Tyagi as CFO alongside his role as Managing Director. With the appointment of Bagri, Tyagi will step down from his additional role as CFO but will continue to serve as Managing Director of the company.

The decision was made based on the recommendations of the nomination and remuneration committee and the audit committee.

Bagri, 52, is a seasoned finance professional with 30 years of experience in corporate finance, treasury, strategic planning and risk management. He is both a Chartered Accountant and a Cost Accountant by qualification.

In his previous roles, Bagri served as Business Head of the Electronics vertical at Reliance Retail, Chief Financial Officer at Bharti Airtel Limited and Held leadership roles in finance at Genpact and GE India.

GST mop-up fourth highest ever but red flags in laggard states

NEW DELHI, Dec 1: The Goods and Services Tax (GST) revenue in November grossed over ₹1.82 lakh crore, the fourth highest monthly collection ever that also crossed the ₹1.80 lakh crore mark for the fifth time in 88 months since July 2017, despite major states such as Andhra Pradesh, Rajasthan and Chhattisgarh showing a dip in growth.

Gross GST revenue collection in November increased by 8.5% to ₹1,82,269 crore compared to ₹1,67,929 crore collected in the same month of the previous year, while the net collection after refunds saw an 11.1% jump at ₹1,63,010 crore as against ₹1,46,786 crore, due to strong domestic business activity as compared to external sector growth.

The net revenue in the month saw double-digit growth mainly because refunds contracted by 8.9% from ₹21,143 crore in November 2023 to ₹19,259 crore in November 2024, according to government data released on Sunday.